When You File an Insurance Claim, Who Is In Charge?

It’s bad enough that your life has been disrupted by serious damage to your home or business. It’s crucial to make certain your loss is fully compensated by your insurance provider. On one hand, it's fortunate you rarely have to deal with your insurance provider when you've suffered a significant loss. But that also means you aren't likely to be familiar with their process. Here are a few pointers that may make the experience less difficult.

Who Receives Payment for an Insurance Claim?

It’s important to understand that in most cases, the insured is in charge when an insurance claim is filed. However, if you have a mortgage on the property that was damaged, your mortgage holder will likely be listed as a "loss payee" on your policy. The check from the insurance company will be made out to both you and the mortgage company, and the funds will be held in escrow until the damage is repaired. The funds are typically released in installments during the course of reconstruction. That can create a situation in which you may have to advance some of the costs until the repairs are verified by the lien holder and the insurance funds are released.

When payment is received from your insurance company, be wary of any check that is marked “full and final settlement” or one that is accompanied by a release form on the claim. It is not required that you sign a release, and it does not protect your interests if it turns out you do not agree with the total settlement your insurance company offers. For the same reason, it is not advisable to cash a check marked “final settlement,” because that could prevent you from collecting additional funds for repairs that have not been paid for.

Be sure to work with a remediation/restoration company who has the knowledge and the processes in place to work on your behalf with your mortgage holder and insurance claims adjuster. This will ensure your insurance checks are processed as quickly as possible, so the restoration process is not delayed because of lack of funds. This will help alleviate any additional stress for you and will help minimize any of your out-of-pocket expenses.

Document Your Damage and Start Mitigation Immediately

It is important as a property owner to document your damage with photographs or video, and to immediately begin loss mitigation procedures yourself – or hire a qualified contractor to do this on your behalf. It is totally inappropriate for your insurance company to put off mitigation while waiting for your insurance claims representative to arrive on the scene to evaluate your loss. By that time, additional damage may occur due to exposure to weather or moisture, and gives microorganisms time to grow. The additional or subsequent damage caused by the waiting time may not be covered by your insurance. Loss mitigation is defined by insurance policies as "reasonable and prudent measures designed to preserve, protect and secure property from further damage," including microbial growth and amplification.

Be Aware, Watch Out, Keep Track of the Money

When your insurance company replaces belongings that have been lost, it's up to you to make certain that they are replaced with the same items, or at least items of the same quality. You don’t have to accept inferior copies.

It's also important to note that it is an insurance-industry standard for policies to pay for "additional living expenses" if your home is so seriously damaged that you must evacuate for remediation and restoration services to be completed. These "additional living expenses" may include temporary living accommodations, a per diem per family member for food, along with reimbursing you for any incidentals such as hygiene items and even transportation costs.

If your claim turns out to be a complicated one, you may be tempted to settle for less than you should because you are frustrated and simply tired of dealing with the settlement process. Resist that temptation. You might consider hiring a public claims adjuster to help you deal with the insurance company. A public adjuster can explain the process and advise you about all the meetings and communications between you and the insurance company as the claim is processed.

How to Choose a Remediation and Restoration Professional

When you initially contact a company to help you deal with your damaged property, look for a company that has the capability to provide remediation and restoration services and who will act as your advocate in dealing with the claim. They should have experience navigating through the claim process followed by your insurance company, and they should work with your best interest in mind. The contractor is working for you, not for the insurance company.

The contractor should be familiar with every aspect of damage recovery and restoration of your property and belongings. That allows you to deal with only one company from the point the damage occurs to the completion of all repairs. That can make the entire process much smoother and more stress free, at a time when more stress is the last thing you need.

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